[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4872 Introduced in House (IH)]
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114th CONGRESS
2d Session
H. R. 4872
To amend the Internal Revenue Code of 1986 to reform the American
opportunity tax credit to support college savings.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 23, 2016
Mr. Ben Ray Lujan of New Mexico introduced the following bill; which
was referred to the Committee on Ways and Means, and in addition to the
Committee on Education and the Workforce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reform the American
opportunity tax credit to support college savings.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Save for Success Act''.
SEC. 2. AMERICAN OPPORTUNITY TAX CREDIT SAVINGS CREDIT.
(a) In General.--Section 25A of the Internal Revenue Code of 1986
is amended by redesignating subsection (j) as subsection (k) and by
inserting after subsection (i) the following:
``(j) Special Rules Relating to AOTC Savings Credit.--
``(1) In general.--For purposes of this section, the term
`qualified tuition and related expenses' with respect to any
individual includes eligible college savings contributions for
such individual. Such contributions shall be taken into account
for purposes of subsection (i)(1)(A) before tuition and fees.
``(2) Limitation.--
``(A) In general.--The aggregate amount of
contributions with respect to an individual which may
be taken into account under paragraph (1) for a taxable
year is $250.
``(B) Phase out.--The dollar amount in subparagraph
(A) shall be reduced (but not below zero) by the amount
which bears the same ratio to such dollar amount as--
``(i) the number of percentage points (if
any) in excess of 133 percent that the
taxpayer's household income for the taxable
year is of the poverty line for a family of the
size involved, bears to
``(ii) 400 percentage points.
``(3) Terms relating to income and families.--The terms
`family size', `household income', and `poverty line' shall
have the meanings given such terms by section 36B(d).
``(4) Eligible higher education contribution.--For purposes
of paragraph (1), the term `eligible college savings
contribution' with respect to an individual means the excess
of--
``(A) contributions by the taxpayer in the taxable
year to qualified college savings accounts of which the
individual is the beneficiary, over
``(B) distributions from all such qualified college
savings accounts for the taxable year.
``(5) Qualified college savings accounts.--The term
`qualified college savings account' with respect to which such
individual is the beneficiary means--
``(A) an account under a qualified tuition program
(as defined by section 529), and
``(B) an account under a program of a State (or
political jurisdiction thereof) established exclusively
for the purpose of paying for college tuition and other
post-secondary educational expenses.
``(6) Portion of credit made refundable.--So much of the
credit allowed under subsection (a) as is attributable to this
subsection (determined after the application of subsection (i)
and without regard to this subsection and section 26(a)) shall
be treated as a credit allowable under subpart C (and not
allowed under subsection (a)). The preceding sentence shall not
apply to any taxpayer for any taxable year if such taxpayer is
a child to whom subsection (g) of section 1 applies for such
taxable year.''.
(b) AOTC Lifetime Limitation.--Section 25A(i)(2) of such Code is
amended to read as follows:
``(2) Limitation.--In lieu of subparagraphs (A) and (C) of
subsection (b)(2), the amount allowed as a credit under this
section for the taxable year with respect to an individual
shall not exceed--
``(A) $10,000, reduced
``(B) by the amount allowed under this section with
respect to such individual for all prior taxable
years.''.
(c) Pilot Program To Make Periodic Payments as College Expenses
Incurred.--Section 25A(i) of such Code is amended by adding at the end
the following:
``(8) Pilot program to make periodic payments as college
expenses incurred.--
``(A) In general.--The Secretary of the Treasury
and the Secretary of Education shall jointly establish
a program designed to make payments periodically to or
on behalf of an eligible student as the student incurs
qualified expenses during the taxable year. The total
amount that may be so paid to or on behalf of an
eligible student through this program shall not exceed
the credit which would (but for subparagraph (B)) be
allowable under this section if subsection (d) were
applied by using the taxpayer's modified adjusted gross
income for the preceding taxable year.
``(B) Credit reduced by pilot program payments.--
The credit allowable under this section (without regard
to this subparagraph) for any taxable year shall be
reduced (but not below zero) by the payments made with
respect to a student under subparagraph (A) for
expenses which would otherwise be taken into account in
determining the credit under this section for such
year.
``(C) Program participation.--Participation in the
program established under this paragraph shall be
voluntary with respect to both students and educational
institutions; except that, institutions which are
taxable under this chapter (other than by reason of
section 511) may not participate in such program.
``(D) Program period.--The program established
under this paragraph shall apply to expenses for
academic periods beginning during the 5-year period
which begins on the date which is 1 year after the date
of the enactment of this paragraph.
``(E) Payments not treated as resources for
financial aid.--Payments made under this paragraph
shall not be treated as resources for purposes of
determining the amount of any financial aid which is
funded in whole or part with Federal funds. Payments
under the program shall not be made in a manner that
would reduce the State, private, or institutional aid
available to an eligible student.
``(F) Notice of program.--Educational institutions
participating in the program established under this
paragraph shall provide appropriate notices to parents
and students of the option of payments under such
program. Such notices shall not be considered tax
advice for purposes of any Federal law or regulation.
``(G) Reporting.--The Secretary of the Treasury and
the Secretary of Education shall jointly submit annual
reports to Congress on the program established under
this subsection, together with any recommendations with
respect to such program.''.
(d) Conforming Amendment.--Section 6211(b)(4)(A) of such Code is
amended by inserting ``or (j)(6)'' after ``subsection (i)(6)''.
(e) Increased Public Awareness of American Opportunity Tax
Credit.--
(1) In general.--The Secretary of the Treasury, or the
Secretary's delegate, in consultation with the Secretary of
Education, shall establish a taxpayer awareness program to
inform the taxpaying public of the availability of the American
Opportunity Tax Credit allowed under section 25A of the
Internal Revenue Code of 1986. Such public awareness program
shall be designed to assure that individuals who may be
eligible are informed of the availability of such credit and
filing procedures.
(2) Means of communications.--
(A) In general.--The Secretary of the Treasury, or
the Secretary's delegate, in consultation with the
Secretary of Education, shall use appropriate means of
communication to carry out the provisions of this
section. The taxpayer awareness program shall include,
but not be limited to, prominent display of information
about the availability of the American Opportunity Tax
Credit on information return forms specified by such
Secretary for use by educational institutions to report
qualified tuition and related expenses incurred.
(B) Additional steps.--In addition, the Secretary
of the Treasury, or the Secretary's delegate, in
consultation with the Secretary of Education, should--
(i) make students aware of the American
Opportunity Tax Credit through the data
retrieval tool and the student aid report of
the Department of Education,
(ii) include information on the financial
aid shopping sheet,
(iii) include the American Opportunity Tax
Credit in the volunteer income tax assistance
program, and
(iv) bring awareness of the American
Opportunity Tax Credit in the Federal TRIO
Programs (commonly known as ``TRIO'') under
chapter 1 of subpart 2 of part A of title IV of
the Higher Education Act of 1965 (20 U.S.C.
1070a-11 et seq.) and in the Gaining Early
Awareness and Readiness for Undergraduate
Programs (commonly known as ``GEAR UP'') under
chapter 2 of subpart 2 of part A of title IV of
such Act (20 U.S.C. 1070a-21 et seq.).
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
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